Clustering and firm performance in project-based industries: The case of the global video game industry, 1972-2007
Explanations of spatial clustering based on localization externalities are being questioned by recent empirical evidence showing that firms in clusters do not outperform firms outside clusters. We propose that these findings may be driven by the particularities of the industrial settings chosen in these studies. We argue that in project-based industries, negative localization externalities associated with competition grow proportionally with cluster size, while positive localization externalities increase more than proportionally related to cluster size. By studying the survival patterns of 4,607 firms and 1,229 subsidiaries in the global video game industry, we find that the net effect of clustering becomes positive after a cluster reaches a critical size. We further unravel the subtleties of the video game industry by differentiating between exits by failure and exit by acquisition, and conclude that being acquired is best considered as a sign of success rather than as a business failure.
|Date of creation:||Nov 2012|
|Date of revision:||Nov 2012|
|Contact details of provider:|| Postal: |
Web page: http://econ.geo.uu.nl
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pierre-Alexandre Balland & Mathijs de Vaan & Ron Boschma, 2011.
"The Dynamics of Interfirm Networks along the Industry Life Cycle: The Case of the Global Video Games Industry 1987-2007,"
Papers in Evolutionary Economic Geography (PEEG)
1114, Utrecht University, Section of Economic Geography, revised Aug 2011.
- Pierre-Alexandre Balland & Mathijs De Vaan & Ron Boschma, 2013. "The dynamics of interfirm networks along the industry life cycle: The case of the global video game industry, 1987--2007," Journal of Economic Geography, Oxford University Press, vol. 13(5), pages 741-765, September.
- Ron Boschma & Koen Frenken, 2011.
"The emerging empirics of evolutionary economic geography,"
Journal of Economic Geography,
Oxford University Press, vol. 11(2), pages 295-307, March.
- Ron Boschma & KOen Frenken, 2010. "The emerging empirics of evolutionary economic geography," Working Papers 10-10, Eindhoven Center for Innovation Studies, revised Nov 2010.
- Ron Boschma & Koen Frenken, 2011. "The emerging empirics of evolutionary economic geography," Papers in Evolutionary Economic Geography (PEEG) 1101, Utrecht University, Section of Economic Geography, revised Jan 2011.
- Breschi, Stefano & Lissoni, Francesco, 2000.
"Knowledge Spillovers And Local Innovation Systems: A Critical Survey,"
ERSA conference papers
ersa00p362, European Regional Science Association.
- Breschi, Stefano & Lissoni, Francesco, 2001. "Knowledge Spillovers and Local Innovation Systems: A Critical Survey," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 975-1005, December.
- Stefano Breschi & Francesco Lissoni, 2001. "Knowledge spillovers and local innovation systems: a critical survey," LIUC Papers in Economics 84, Cattaneo University (LIUC).
- Engwall, Mats, 2003. "No project is an island: linking projects to history and context," Research Policy, Elsevier, vol. 32(5), pages 789-808, May.
- Agarwal, Rajshree & Gort, Michael, 1996. "The Evolution of Markets and Entry, Exit and Survival of Firms," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 489-98, August.
- Cooke, Philip & Gomez Uranga, Mikel & Etxebarria, Goio, 1997. "Regional innovation systems: Institutional and organisational dimensions," Research Policy, Elsevier, vol. 26(4-5), pages 475-491, December.
- Ron A. Boschma & Rik Wenting, 2007. "The spatial evolution of the British automobile industry: Does location matter?," Industrial and Corporate Change, Oxford University Press, vol. 16(2), pages 213-238, April.
- Guido Buenstorf & Christina Guenther, 2011. "No place like home? Relocation, capabilities, and firm survival in the German machine tool industry after World War II," Industrial and Corporate Change, Oxford University Press, vol. 20(1), pages 1-28, February.
- Agrawal, Ajay & Cockburn, Iain, 2003. "The anchor tenant hypothesis: exploring the role of large, local, R&D-intensive firms in regional innovation systems," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1227-1253, November.
- Stephen Appold, 2005. "Location Patterns of US Industrial Research: Mimetic Isomorphism and the Emergence of Geographic Charisma," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 17-39.
When requesting a correction, please mention this item's handle: RePEc:egu:wpaper:1221. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.